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Loyalty programs go mobile

Consumers increasingly use smartphones, apps for rewards

Consumers increasingly use smartphones, apps for rewards

Canadians are taking their enthusiasm for loyalty programs into the mobile sector.

Increasingly, they are using retailer-specific mobile apps to locate the nearest store that supports their favourite program and check for in-store offers to boost their reward totals.

If you are one of the 10 million members of the Shoppers Optimum Rewards Program, for instance, one of the largest loyalty programs in Canada, the company's Shoppers Drug Mart Everyday app lets you check your points balance, look for promotions or contact your pharmacy.

"Our app is an increasingly important vehicle to communicate, interact and engage our customers in conjunction with our other channels of communication, such as our 600,000 strong Facebook community and 14,000 Twitter followers," says Tammy Smitham, vice-president, communications and corporate affairs.

At present, Optimum plan members need to present their membership card at the checkout to earn points. But Smitham says work is underway on the launch of a mobile Shoppers Optimum Rewards Card. The new initiative will put Shoppers squarely in the midst of a burgeoning new trend. Leaving physical cards at home, essentially having a "mobile wallet," is likely to become the new norm.

In November 2012, CIBC took a step toward this new reality by unveiling the CIBC mobile payment app, and in the process made history in mobile commerce in Canada by completing the country's first mobile credit card transaction. Cheryl Longo, executive vice-president, card products, CIBC, says "the decision to offer the new capability reflects the high level of smartphone adoption among Canadians."

According to a CIBC/Harris Decima poll released to coincide with the launch of the app, 44 per cent of Canadians surveyed own a smartphone, up from 33 per cent in a similar poll conducted one year earlier. Among smartphone owners, 51 per cent of respondents 25 to 34 years of age and 48 per cent of those 45 to 54, said they would consider mobile payments. The poll has a margin of error of plus or minus 2.2 per cent, 19 times out of 20.

What's most telling in terms of loyalty programs is 66 per cent of smartphone owners in the 25 to 54 age group say loyalty rewards for credit card purchases are important to them when considering mobile payments.

This attitude reflects a growing trend among CIBC rewards credit card holders toward migrating more of their small ticket purchases onto their credit cards and earning reward points, Longo says. "You could easily build up reward points by using our mobile payment app for your daily coffee instead of fishing toonies and loonies out of your pocket."

Rewarding members for using mobile apps is likely to gain traction, says Simon Keogh, director, digital marketing, mobile and social media, LoyaltyOne. When Air Miles launched its latest mobile app there was "an immediate and sustained transactional lift among members of between five per cent and 20 per cent, which illustrates the power and potential of the mobile space," he says.

This is why Air Miles is "developing the ability to deliver unique and personalized offers to its loyalty plan members through their mobile devices that will let them earn more points," he adds.